Meats Futures


Meats Futures is a platform where farmers and processors of livestock can make their futures contracts available to the public. This allows investors to invest in livestock production as they would any other commodity. In theory, as demand for meat increases, so will the price of the futures contract.

More About Meats Futures

Continue reading to learn more about:

What are the market's futures?
The difference between futures and commodities
How do futures work for commodities?
Features of commodity futures
Livestock futures


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What are the market's futures?


The futures markets are active marketplaces where participants trade standardized contracts in commodities, securities, and indexes. Futures contracts offer a way to manage the risk of future price fluctuations for assets such as pork bellies, tungsten and the S&P 500′s.


 
 

The difference between futures and commodities


Commodities are goods or products such as gold and oil bought and sold in large quantities on the commodity markets. A futures contract is an agreement to buy or sell a specified amount of a commodity at a specific date in the future. The main difference between futures and commodities is that while with commodities you need to take actual delivery of the product, with futures you make a commitment to buy or sell the product at a specified price on a specified date in the future.

 

How do futures work for commodities?

Commodities are traded on a futures exchange. Futures are a standardized form of agreeing to buy or sell an underlying commodity at a given price for delivery at an agreed upon time in the future.

There are two main types of futures contracts: cash-settled and physically-delivered.

•In a cash-settled contract, the buyer only needs to make the difference between the current value of the index and the settlement price if the settlement price is higher. This is called a cash settlement.

•In a physically-delivered contract, the buyer has to take delivery of actual commodities which they previously bought.

 
  • Features of commodity futures

    Commodity futures are standardized contracts between buyers and sellers to buy or sell a quantity of a commodity at a specific price on a specific date. Futures let people manage exposure to the risk of a rise or fall in prices of commodities, so they can buy or sell the commodity they want to trade at the price they want to pay.
  • Livestock futures

    As the name suggests, livestock futures are an agreement to buy and sell a particular type of livestock. They are popular with farmers who want to manage their risk, be financially prepared for future problems and receive more money for their animals than if sold on the spot market.